The Egyptian oil minister has confirmed that $9 billion is to be invested by the country's state-owned producer in the construction of a new refinery.

According to Sameh Fahmy, the five-year project is necessary as heavy overseas consumers, most notably the United States and Europe, have failed to establish new refineries in the country for almost 20 years, prompting Gulf states to invest in emerging producers, such as China and Egypt.

As such, the Egyptian General Petroleum Corporation (EGPC) is due to start work on the 350,000 refinery as soon as a site has been confirmed, with Port Said and the town of Gamassa presently the most likely candidates.

Mr Fahmy added that several Gulf states will be involved in financing the work, though Saudi Arabia is likely to take a lead role due to its particular refining needs.

"Saudi Arabia is the biggest heavy crude oil producer in the Gulf," he told Reuters.

"However, that type of crude is not widely used in oil refineries because it does not produce gasoline. Light crude oil produces gasoline and is therefore more attractive, so Saudi investors resort to markets such as Egypt to address that problem."

At the same time, Libyan investors have also revealed that they are looking into the possible construction of a $10 billion refinery on the north coast of Egypt.

Global Education and Training event for Oil and Gas: Refining & Petrochemicals